New York's Biggest Budget Doubles Down on the Mistakes Driving People Out

On Thursday night, New York lawmakers approved a $254 billion spending plan—the largest in the state’s history and up from the $229 billion budget of just one year ago. The over 10 percent increase pushes spending beyond both inflation and the overall growth of the economy, even as families and small businesses struggle to keep up with rising costs.

Gov. Kathy Hochul announced the budget over a month past the April 1 deadline. Lawmakers spent over three weeks locked in debate—not over how to save more but how to spend more. Public schools, transit systems, and entitlement programs all received major boosts, mostly without meaningful reform or any evaluation of outcomes.

The budget uses emergency reserves, meant for economic downturns, to pay off a $7 billion unemployment insurance debt. That debt originated during forced business closures in 2020 and 2021. Rather than allow businesses to repay over time, lawmakers chose to erase the balance using state cash. Draining savings to clean up past mistakes reduces preparedness for future risks. Credit agencies have warned about the long-term effects of shrinking rainy-day funds.

Supporters point out benefits such as a $1 billion tax cut aimed at middle- and lower-income earners. On paper, income tax rates will drop to the lowest levels in decades. However, those savings vanish when packaged with higher payroll taxes, transit fees, and utility charges. Without serious reductions in overall spending, temporary cuts do not provide lasting relief.

A new $340 million allocation will fund free school meals for all public school students. That program adds to an already massive system where annual per-student spending exceeds $30,000. Despite this investment, graduation rates and test scores have shown little improvement. No new rules tie funding to performance or outcomes. More money enters classrooms, but learning results remain stagnant.

State leaders also committed $77 million to subway safety and modernization. That support came with a payroll tax hike for employers. Business owners, especially in downstate regions, face growing tax bills in return for marginal transit improvements. Many have already downsized, relocated, or reduced hiring. Job creators continue to face rising costs without corresponding benefits.

Other changes add layers of regulation to daily life. A new rule bans phone use in public schools across all districts. Another provision increases penalties for those who wear masks while committing a crime. Both measures reflect a broader trend—centralized mandates replacing local decisions. School boards and communities lose flexibility, and individuals face stricter rules handed down by state-level authorities.

To address cost-of-living pressures, the plan includes a $2 billion fund for direct payments to households up to $400 each. Funds come from borrowed money and redirected tax revenue. These one-time rebates will not reduce rent, insurance, or grocery prices in the long term. Public officials are spending more in hopes of calming dissatisfaction, while structural causes of inflation remain in place.

Budget watchdogs raised alarms over the absence of long-term planning. Projections show billions in future deficits over the next three years. No new laws cap agency growth or demand department reviews, and lawmakers failed to adopt zero-based budgeting, a method that would require programs to justify their full cost each year. Instead, past baselines remain, and annual spending increases continue unchecked.

This is the continuation of policies that have caused massive migration out of the state. From 2020 through 2023, New York lost over 500,000 residents, with many citing taxes, cost of living, and lack of opportunity as their reasons for leaving. Business owners closed operations or moved their headquarters to states with leaner budgets and fewer regulations. Professionals, retirees, and young families followed. Wealth, talent, and ambition are voting with their feet.

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